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Hazelwood – 11th hour emergency intervention should not be ruled out

Hazelwood – 11th hour emergency intervention should not be ruled out

"With only a week to go until the closure of Victoria's Hazelwood power station, Ai Group's members are not convinced that the risks to energy users are being managed effectively and their confidence in both energy prices and supply is eroding," Ai Group Chief Executive, Innes Willox, said today.

"While the risks are most acute for energy-intensive industries, they have implications for businesses along all domestic supply chains, their employees as well as for households. In the absence of convincing and appropriately sequenced alternative strategies, the state and federal governments should remain open to finding an 11th hour solution to keeping Hazelwood operating in some form.

"Hazelwood is a major source of supply in the National Electricity Market. The tightening of electricity supply and demand, which has increased the significance of natural gas-fired electricity generation even as gas prices soar, has seen the electricity futures price double across most of the market over the past year. The price rises are putting all energy users, especially trade-exposed manufacturers, under mounting pressure, and the Hazelwood closure is clearly a part of this.

"Reliability of supply is also a concern. The Australian Energy Market Operator (AEMO) projects that the Hazelwood closure will not lead to a breach of the reliability standard – but only if there is a market response to fill the gap. And a lot hangs on that 'if'.